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1. What is an Encumbrance Certificate ? 

An encumbrance certificate is a legal document that will tell you if there are any financial or legal charges against the property. You can get an EC by going to the appropriate Sub-Registrar's Office. While purchasing a home, it is critical to determine whether or not there are any legal issues. If you're wondering how you can receive this information as a buyer, an Encumbrance Certificate (EC) can assist you figure out if the property has any charges against it. The lender will apply a "Lien" or a charge on the property if it is purchased with a mortgage or if it has been pledged. This will prevent the borrower/property owner from selling the property until the debt is fully paid off.The cost of applying for an Encumbrance Certificate varies from state to state. It is dependent on the property's location and the state government that governs it. 

2. Why is it important? 

Obtaining an Encumbrance Certificate guarantees that the property you seek to purchase is free of any financial or legal obligations. If you find a charge on your EC, it is critical that you correct it before proceeding with your transaction. It will also assist you in determining whether there are any existing owners who are legally entitled to claim the land.